Are tutoring services tax deductible for Learning ...

Customer Question

The IRS has ruled that tuition costs for a special school that has a program designed to educate children with learning disabilities and amounts paid for a child’s tutoring by a teacher specially trained and qualified to deal with severe learning disabilities may also be deducted. (Revenue Ruling 78-340, 1978-2 C.B. 124.) Special instruction or training or therapy, such as sign language instruction, speech therapy, and remedial reading instruction also would be deductible. Related books and materials can qualify for the medical expense deduction.

Generally, to qualify for the deduction, the child’s doctor must recommend the special school, therapy, or tutoring, and there must be a medical diagnosis of a neurological disorder, such as severe LD, made by a medical professional. Transportation expenses to the special school or to the tutor also qualify for a medical expense deduction. If transportation is by car, the allowable expense in 2005 is fifteen cents per mile plus parking and tolls, or the actual cost of operating the vehicle.

Diagnostic evaluations also qualify for a medical expense deduction. This can include testing by a speech-language pathologist, psychologist, neurologist, or other person with professional qualifications.

Note: Expenses claimed as a medical expense deduction and later reimbursed by a school district or insurance company must be reported as taxable income for the year in which the reimbursements are received.

Medical expenses must be claimed on Schedule A, Itemized Deductions, and are subject to certain limitations. First, the family must have itemized deductions that exceed their standard deduction in order to use Schedule A. Second, medical expenses are allowed as a deduction only to the extent that they exceed 7.5 percent of adjusted gross income, a significant threshold for many families. (See IRS Publication 502, Medical and Dental Expenses.)

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Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

Reply to Renu V's Post: Along with this deduction can you also claim all other medical/dental expenses in that year along with transportation, prescriptions? And if you made say 100,000yr your medical expenses would have be in excess of 7500 for that calendar year?
What would the amount of return be on your taxes?

Yes, you can include other medical/dental expenses in that year along with transportation, prescriptions on Sch A as medical expense.
You medical expense has to be over 7.5% to be deductible.

Any amount over $7,500 will be deductible. You will be better off claiming itemized deduction if you total itemized deduction is over $5,150 for single ($10,300 for married filing joint or $7550 for HOH)for 2006 (considering that you are under 64 years old)
If your taxable income is in 25-28% tax bracket, than what you would save will be 25-28% in taxes on any medical expense deduction over $7,500.

Let me know if you have any question.
XXX@XXXXXX.XXX

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

Reply to Renu V's Post: So if your total medical expense is $7600 you can only claim $100? And if you file using your itemized deductions you can not claim medical expenses too? It appears that all disability expenses would have to come out of pocket.

In the above described case yes....if your medical expense is only $100 ( in excess of $7500) and you do not have other itemized deductions like mortgage interest etc... than you will not get any benefit out of this deduction.

Let me know if you have any question.
XXX@XXXXXX.XXX

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. OrvilleHesperia, California

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